Friday, July 28, 2006

Heinz Announces Governance Reforms

Seeking to woo institutional investors, H.J. Heinz Co. has embraced majority voting in board elections and other corporate governance reforms. The company unveiled these policy changes on July 20 as it sought support from state and union pension funds in a proxy contest with billionaire shareholder Nelson Peltz.

Heinz announced these commitments after CEO William Johnson met with representatives from the California Public Employees' Retirement System (CalPERS), the largest U.S. state pension fund. The Pittsburgh-based ketchup maker also detailed these steps during a presentation to the Change to Win labor federation.

Heinz officials have told ISS that the company will adopt a full majority vote standard with a director resignation policy, as Intel, Dell, and more than 30 other firms have done. In addition, Heinz said will ask shareholders to vote to change supermajority voting rules to require only 60 percent approval, rather than 80 percent, to make certain charter and bylaw changes. The company also promised to put any "poison pill" plan to a shareholder vote within a year of adoption.

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